Taiwan-based passive component makers continue to experience sluggish demand for consumer electronics, placing their hopes on demand for automotive applications to fuel second-half revenue growth, according to industry sources.
In the face of sluggish consumer electronics demand and unfavorable macroeconomic conditions, Yageo, Walsin Technology, and other passive component suppliers continue to adjust inventory, the sources indicated. Nevertheless, they believe that the worst is over, with some managing to attain healthy inventory levels, the sources said.
Following the completion of inventory adjustments, Taiwan-based passive component companies generally anticipate that the following phase of the industrial cycle will rapidly boost their activities.
Regarding the current state of the market, Yageo and Walsin concur that inventory adjustments are ongoing, but operations are not dreadful. Regarding the second half of 2023, Pierre Chen, chairman of Yageo, predicted that the recovery would be L-shaped rather than V-shaped.
Automotive products have propelled the reasonably stable performance of key passive component manufacturers in 2023, thanks to the popularity of small fuel vehicles and electric vehicles, according to industry sources. Yageo and Walsin are both capable of volume producing automotive MLCCs.
Yageo's new plant at the Dafa industrial park in Kaohsiung, southern Taiwan is expected for kick off commercial production later in the second half of this year, the sources indicated. The plant will bring in additional production capacity for high-end MLCCs.
Walsin has secured a 5-year LTA supply contract with tier-1 automotive customers, the company disclosed previously. Walsin automotive MLCCs are used in a variety of applications, including fuel vehicles, electric vehicle power management systems, and audio-visual entertainment systems.
Walsin's sales generated from the automotive segment have contributed less than 10% of company revenue. The proportion is poised to expand and surpass 15% in 2024, which will buoy the passive component company's gross margin performance, according to market sources.
Article translated by Jessie Shen
